NEW YORK xxx8211; A handful of potential bidders, including private equity firms, are lining up to look at BlackBerry Ltd , but initial indications suggest that interest is tepid and buyers are eyeing parts of the Canadian smartphone maker rather than the whole company, several sources familiar with the situation said.

Private equity firms are mostly interested in businesses such as BlackBerryxxx8217;s operating system and the patents around its keyboard, two of the sources said. However, one possibility is for a Canadian pension fund to team up with an investor to buy the whole company, which is currently worth a little more than $5 billion, one of the sources said.

BlackBerryxxx8217;s biggest shareholder, Fairfax Financial Holdings Ltd, has approached several large Canadian investment funds about forging a deal to take the smartphone maker private, Reuters reported last week.

Fairfax has a 10% stake, and its chairman and chief executive, Prem Watsa, has left BlackBerryxxx8217;s board already to avoid any possible conflict of interest as the company assesses its strategic options.

Nevertheless, in recent days a few private equity firms have signed confidentiality agreements or have agreed to meetings with the company to gain access to the companyxxx8217;s books, the sources said, adding that the sale process was expected to start in a few weeks.

BlackBerry declined to comment.

The apparent lack of interest among private equity firms in the whole company underscores the challenges BlackBerry has been facing in competing with rivals such as Apple Incxxx8217;s iPhone and devices using Google Incxxx8217;s Android technology.

Its new BlackBerry devices hit store shelves this year just as the high-end smartphone segment was showing signs of saturation in markets such as the United States. Samsung Electronics recently reported results that fell shy of expectations, while Apple earlier this year reported its first quarterly profit decline in more than a decade.

The new BlackBerry device has so far failed to gain traction with consumers, and the company - which pioneered mobile email with its first smartphones and email pagers and was once a stock market darling - has seen its shares plummet. Its market value has fallen to $5.4 billion, from $84 billion at its peak in 2008. Shares closed down 1.4 percent at $10.28 on the Nasdaq on Friday.

Last month, the company said it was weighing its options, which could include an outright sale, after Reuters first reported that companyxxx8217;s board was warming up to the possibility of going private.

Industry sources said several of the biggest private equity firms and some of the Asian hardware makers had decided against a deal for the company. Still, the sources added some BlackBerryxxx8217;s assets could be of interest to buyers.

According to analysts, BlackBerryxxx8217;s assets include a shrinking, yet well-regarded services business that powers its security-focused messaging system, worth $3 billion to $4.5 billion; a collection of patents that could be worth $2 billion to $3 billion; and $3.1 billion in cash and investments.

Even at a conservative estimate, that is more than the companyxxx8217;s $5.4 billion market value. Analysts said the smartphones that bear its name have little or no value and it might cost $2 billion to shut the unit that makes them.

Many hurdles remain to a deal. Private equity firms have circled the company for more than two years and have tried without success so far to figure out ways to structure a deal.

Moreover, Ottawa reviews any big takeover of a Canadian company for competitive and national security reasons. Government officials have often said they want BlackBerry to succeed as a Canadian company, but concede they do not know how things will play out.

I have wondered many times how differently things would have gone for BB if they had told all the governments where to stick it when they were asking for access to BB's encrypted network a few years ago. They would have lost some business, but it looks like they ended up losing it anyway. That security was something they had that no one else had, or has now. I still wonder if they could rebuild and rebrand themselves successfully by placing privacy at the center of their operations. If the Canadian government would stand behind such a venture (ha!), they could theoretically claw back very quickly. Even the most law-abiding citizens are concerned about their privacy these days. To say nothing of those of us with a few dirty secrets.

I disagree completely. I think a lot of people care, they just don't know how to protect themselves or change anything.

I think a lot of people care as well. Having said that, I think a lot more people choose convenience over security anymore. Why do you think so many people don't password protect their devices? It is too inconvenient to take the extra 2 seconds to enter a password. I think the convenience crowd outweighs the security/privacy crowd.

__________________The difference between stupidity and genius is that genius has its limits.When you take things for granted, the things you are granted, get taken. Even a mosquito doesn't get a pat on the back until it starts to work.Too many people miss the silver lining because they're expecting gold.[BES 5.0.3 / GroupWise 2012 HP2]